India Inflation Forecast: The ongoing firefight between Iran and Israel may reach India as well. The recent report of ICICI Bank on the inflation front has attracted everyone’s attention.

According to the report, due to the rising energy prices, the country’s retail inflation rate is likely to reach 4.5 percent in the financial year 2027. Due to which the prices of everyday goods and services may increase. Let us know about this report in detail…

What does the report say?

Regarding inflation, the bank has changed its earlier Consumer Price Index (CPI) estimate of 3.9 percent. The main reason for this is being said to be the rising prices of petrol and diesel. Due to increase in oil prices, it affects other sectors also. According to the report, now the estimate has been re-evaluated considering the inflation trend.

However, the report also says that inflation will remain under control in India in the financial year 2026. Earlier, CPI was said to be 2.1 percent. At the same time, changes have been made in the new series.

Inflation mathematics changed in new series

After the change in the method of measuring inflation, the consumer basket has also changed. In the new series, the share of food items has been reduced to 36.8 percent. Which is about 9.1 percent less than before. On the contrary, the weightage of petrol, diesel and LPG has been increased. Due to which the effect of fuel prices will now be visible more clearly.

According to the bank’s estimates, every $10 per barrel increase in the price of crude oil can have a direct impact on CPI by 40-45 basis points and an overall impact of 50-60 basis points. This means that now fluctuations in oil prices will have a stronger impact on inflation than before.

Reserve Bank of India estimates

RBI has also changed its estimates regarding inflation. In the February monetary policy meeting, changes have been made in the CPI inflation figures for the financial year 2027.

According to the new estimate, inflation is expected to be around 4 percent in the first quarter of FY 27 and 4.2 percent in the second quarter, which is slightly higher than the earlier estimate.

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